Greens urge investment in clean energy

It is understood that Mr Osborne will seek to encourage investment in gas through tax breaks and new regulations for the controversial process of extracting gas from shale - fracking.

The announcement expected in the Chancellor's autumn statement is likely to delight Tory MPs who see gas as the route to cheap energy bills for consumers.

But Friends of the Earth director Andy Atkins warned the government that a "reckless dash for gas will send the nation speeding in the wrong direction.

"A strong economy and protecting the environment should go hand-in-hand but the Chancellor's short-term agenda threatens to wreck them both."

He also pointed out that experts have predicted that gas prices and fuel prices will continue to rise, leaving consumers no better off.

Mr Atkins said the government should instead focus on "clean British energy, cutting energy waste and building a power system that people and the planet can afford."

Meanwhile a report for WWF-UK and Greenpeace published today found that substantial investment in offshore wind farms would boost the economy, reduce gas imports and create more jobs than relying on gas-fired plants.

Greenpeace executive director John Sauven said the government's strategy outlined in last week's Energy Bill would not inspire confidence for investors to spend billions of pounts on renewables.

"Investment in wind energy will allow us to kick our expensive and polluting gas habit," he said, arguing that the billions Britain gives to Qatar every year for gas imports should be spent on renewable energy instead.